1 March 2023

Home working is here to stay – let’s embrace it and get our economy moving

By Dave Page

The United Kingdom’s economy is stagnant. This is an undeniable truth and a problem that the Chancellor will want to address in the coming Budget. We only just managed to avoid a technical recession last year. This year is no better, with the IMF suggesting that our economy will shrink by 0.6%. The IMF may be mistaken – they often are – but that does not mean we should pretend that everything is rosy.

One of the main problems that continues to affect our economy is weak productivity. In 2021, our productivity was more than 10% lower than France or Germany, and nearly 20% less than the United States. One way that we can improve productivity in this country is to embrace the new hybrid way of working that has emerged due to Covid.

Home working is here to stay. This much should be clear to anyone with a passing awareness of business. Covid has fundamentally shifted the modern way of work and any attempts to return to the 5-day week are as fruitless as closing the barn door after the horse has bolted.

Employees know that hybrid working is possible, the technology that enabled the world to keep functioning during the pandemic has only improved – as has our willingness as employees to adapt and incorporate that flexibility into our work lives. That flexibility has been embraced by many companies as they seek to maximise efficiency in a time of rising inflation that can only be countered by increased productivity.

Despite what certain politicians believe, working from home – when done correctly – does increase productivity. You can reduce travel time and cut spiralling travel costs, cut business expenses and minimise distraction. Embracing flexible working also makes your company far more attractive to potential employees. In the UK, more than half of adults have embraced work-life flexibility and want to work from home more frequently – as opposed to only 8% who want less hybrid work.

Yet, despite the clear demand for hybrid and remote work, the number of jobs offering this is on the decline. Recent figures from LinkedIn show that the number of remote opportunities may have passed its peak, with remote listings on its jobs site falling from 16% at the start of 2022 to 12% in December 2022.

Of course, the option of home working can be abused by unscrupulous employees, but the Government should not be viewing the concept through that lens. Instead, ministers should be looking for ways to make home working even more productive. We need to accept the reality of this fundamental shift in workplace trends and work to maximise its potential. There is scope for a game changing shift if only the Government embraces the clear benefits of hybrid working, or at the very least removes obstacles and not create new ones for hybrid workers.

However, for all its benefits – there are still significant problems facing home working – particularly around connectivity. Polling previously carried out on Actual Experience’s behalf found nine in ten hybrid workers say they encounter some internet failures and more than half say their personal productivity is reduced because of them. Nearly half say that as a result of technology traumas they find working from home a stressful business. Overall, our analysis suggests, UK GDP is 3% than it should be – equivalent to lost national output of £60bn a year.

So, what are some solutions that the government needs to consider? Firstly, the Government needs to stop badmouthing flexible working or working from home. Instead, it needs to embrace this once-in-a-generation opportunity to develop a new business standard that could reenergise the UK and demonstrate how the UK is a business-friendly country.

Another aspect that the government needs to consider is business quality broadband being provided to homes. It is possible to have business connections but companies are unable to provide employees funding or expense the costs unless they want to face higher taxes. This should be done away with – it is simply not right that businesses should get punished for giving employees a better internet connection for work activities. Being actively punished for trying to improve productivity and boost the economy runs counter to everything the Government should be standing for.

Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.

CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.

Dave Page is Co-Founder of Actual Experience.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.